The Petroleum Institute of East Africa has waded into the taxation debate on cooking gas saying the expected price rise on liquefied petroleum gas (LPG) will cut demand and reduce jobs in the industry.
Furthemore, cooking gas firms and providers want the government to retain cooking gas as zero-rated, citing a depressing impact on the nation’s economic growth and health.
The institute said introducing 16 per cent value added tax (VAT) will stifle Kenya’s LPG growth target to 18 million by 2030 from the current 4.5 mil-lion units.
“The anticipated revenue that the government hopes to collect from imposing 16 per cent VAT will completely be outstripped by the attendant massive costs on children’s lives, health, food security, deforestation, investments, jobs, wealth creation, ex-port, tourism, water and sanitisation,” Ms Wanjiku Manyara, Piea general manager said in a statement last week.
The National Treasury pro-posed introducing the 16 per cent VAT on LPG, which would see its cost rise by more than Sh350 from July 1. It aims to collect Sh7 billion from the tax to finance development for fiscal 2021/22. The expected raise has seen government turn its focus of reducing LPG cost to raise its use among low-income Kenyans.
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